From my point of view, this is an exciting time of year. Harvest is an opportunity for each of you in the row-crop business to enjoy the fruits of your labor. It is a reward that is impacted not only by decisions you make throughout the growing season but also the will of Mother Nature.
In today’s environment, agriculture continues to enjoy advancements in technology that work to reduce the risks associated with weather. Your adoption of this technology impacts yields and profitability in your operations.
Data management, precision practices and improved seed genetics continue to provide opportunities for better yields with greater efficiencies. In fact, if you look at the major grains, it is no surprise that production continues to increase on a per-acre basis. However, demand is struggling to keep up, as indicated by the increase in carryover of grain stocks. This is negative for the row-crop producer but a benefit for those who are feeding livestock.
If we raise more, we must use more. With usage tied to food security, policy and exports, there is no easy answer to a complex issue.
Several policy conversations are taking place right now that will impact agriculture and our ability to increase usage. As an industry, we need to be sure our voices are being heard throughout these conversations. We can make an impact. The ag business community is doing our part to protect and improve your livelihood.
The most critical discussions include the following:
Conversations are currently under way to revise/rework NAFTA. The U.S. annually runs at a trade surplus with Mexico, while Canada represents our largest agricultural export market. The current directive from agriculture is to do no harm to our industry, keep this a tri-lateral agreement and move quickly.
Meanwhile, the renewable fuel standards are currently under attack. Early discussions by the EPA would reduce biodiesel requirements for 2018 by 315 million gallons and 2019 requirements by 1 billion gallons from current levels. These changes would mean less demand for grain in the renewable fuel industry. For now, ethanol mandates remain unchanged.
Finally, discussions have begun on the 2018 Farm Bill with the goal to have it completed before its effective date. This would be a change from our current bill. This legislation is key to stability in your operations and important to anyone tied to agriculture. Areas that may experience change include the Margin Protection Program for milk; county payment under Agriculture Risk Coverage, including cotton in Title 1; and food safety. Of particular interest to many of you is crop insurance. Early indications appear to support limited changes.
The decisions that will be made by our leaders over the next few months will surely impact your livelihood. Conversations with these leaders during this process will make a difference. Make your voice heard.
Your cooperative will hold its annual meeting Tuesday, Nov. 28, 2017, in Columbia, Mo. Member interest and involvement is an important component in the success of MFA. This meeting is an opportunity to gain further insight into the corporate strategies and future direction. MFA exists to provide economic benefit to our member owners while also generating profitable growth for the company. Sales growth during fiscal year 2017 is evidence we are providing value to your operations. Pre-tax profits of $10.2 million provide a respectable return for the company.
At its September meeting, your Board of Directors approved payment of patronage and retirement of back equities. Total cash payments are estimated to be $6.2 million. Details will be provided at the annual meeting. We have a solid program including Max Armstrong as the keynote speaker (see page 4 of this issue). I hope you can attend.